About

JPMorgan Chase reported a better-than-expected adjusted quarterly profit as the biggest U.S. bank kept a lid on costs and set aside less money to cover bad loans.

The bank, which agreed last week to pay $2.6 billion to settle government and private claims over its handling of accounts of fraudster Bernie Madoff, said fourth-quarter net income fell 7.3 percent to $5.28 billion, or $1.30 a share.

Adjusted for special items, the company earned $1.40 a share, beating the average analyst estimate of $1.35, according to Thomson Reuters I/B/E/S.

The results took into account gains from the sale of Visa (V) shares and One Chase Manhattan Plaza and legal expenses related to the Madoff settlements.

JPMorgan (JPM), which agreed to pay nearly $20 billion in 2013 to settle assorted legal claims, had estimated that settlement of the Madoff claims would subtract $850 million from fourth-quarter earnings.

"It was in the best interests of our company and shareholders for us to accept responsibility, resolve these issues and move forward," Chairman and Chief Executive Officer Jamie Dimon said in a statement Tuesday.

JPMorgan shares, which have been trading this month at their highest levels since 2000, were up 0.5 percent at $58 before the opening bell on the New York Stock Exchange.

Search Jobs

The stock rose 33 percent in 2013, in line with the 35 percent rise in the KBW Bank index and slightly ahead of the 29 percent gain in Standard & Poor's 500 stock index.

Special items highlighted by the bank subtracted 10 cents a share from fourth-quarter earnings, compared with a two-cent boost in the same quarter of 2012.

The special items included a benefit of 21 cents a share from the sale of Visa shares and 8 cents from the sale of One Chase Manhattan Plaza and an expense of 27 cents a share from legal bills, including the Madoff settlements.

Three months ago, JPMorgan reported its first quarterly loss under Dimon after recording after-tax expenses of $7.2 billion to settle government and private investigations.

The allegations involved, among other things, shoddy dealing in mortgage instruments before the financial crisis, derivatives trading in London and pricing in electric power markets, as well as failing to report suspicions of wrongdoing by Madoff.

Investors have been looking for reassurance from the company that the worst of its legal expenses are behind it.

JPMorgan said its assets shrank to $2.42 trillion at the end of December from $2.46 trillion three months before and $2.36 trillion a year earlier, but it remains the biggest U.S. bank by that measure.

The bank's market share in equity underwriting rose to 8.3 percent in 2013, moving it to second place in the industry from fourth. Goldman Sachs Group (GS) led with 11.4 percent.

Higher interest rates on home mortgage loans weighed on JPMorgan, like the rest of the banking industry.

JPMorgan lost $274 million, pre-tax, making mortgage loans, compared with a profit of $789 million a year earlier as margins declined and as the company was unable to reduce expenses as quickly as lending volumes declined.

The bank said it expected to lose money making mortgages again in the first quarter of this year.

Reflecting a slowdown in loan refinancing, total U.S. home mortgage borrowing was down 50 percent at the end of December compared with a year earlier and down by a quarter from the end of September, according to the Mortgage Bankers Association.

-Reporting by David Henry and Lauren Tara LaCapra in New York and Tanya Agrawal in Bangalore.

Swiss bank UBS blames a rogue trader at its London office for a $2.3 billion loss that is Britain's biggest-ever fraud at a bank. Kweku Adoboli, the 32 year old trader, is sentenced to seven years in prison. Britain's financial regulator fines UBS after finding its internal controls were inadequate and allowed Adoboli, a relatively inexperienced trader, to make vast and risky bets.

The case has echoes of Societe Generale trader Jerome Kerviel, who hid €5 billion in losses. Kerviel said SocGen turned a blind eye to his colossal positions in late 2007 and early 2008 as long as they made money for the bank.

Wells Fargo Bank agrees to pay at least $175 million to settle U.S. Department of Justice accusations that it discriminated against qualified African-American and Hispanic borrowers from 2004 through 2009. The department said the bank's discriminatory lending practices resulted in more than 34,000 African-American and Hispanic borrowers in 36 states and the District of Columbia paying higher rates for loans solely because of the color of their skin.

JPMorgan Chase announces a loss of $2 billion from a trade that was meant to protect the bank if the global economy sharply deteriorated. Later, losses from the bad trade swell to nearly $6 billion and shave much more from the company's stock market value. The episode heightens concerns that the biggest banks still pose risks to the U.S. financial system, less than four years after the financial crisis.

Barclays agrees to pay more than $450 million to U.S. and British regulators to settle charges that it attempted to manipulate a global benchmark interest rate known as LIBOR. The rate indirectly affect the costs of hundreds of trillions of dollars in loans that people pay when they get loans to go to college, purchase a car or buy a house. Numerous other banks are under investigation for similar violations.

UBS pays $1.5 billion to settle LIBOR manipulation charges with regulators in the U.S., Britain and Switzerland. The bank says some of its employees tried to rig LIBOR in several currencies.

An independent review finds Kabul Bank spirited some $861 million out of war-torn Afghanistan in a massive fraud based on fake loans to 19 individuals and companies. A bailout of the bank costs the equivalent of 5 percent of Afghanistan's gross domestic product, making it one of world's largest banking failures ever.

HSBC, Europe's largest bank, says it's paying $1.9 billion in penalties to settle a U.S. money laundering probe. The investigation into HSBC focused on the transfer of billions of dollars on behalf of nations such as Iran and the transfer of money from Mexican drug cartels. The bank said its anti-laundering measures were inadequate and said it was "profoundly sorry."